DAVY VIEW

BetMGM presented a business update yesterday (December 4th). The financial takeaways were that 2024 will be a loss-making investment year and that it expects $500m of profitability in 2026, with both of these forecasts below our forecasts and consensus expectations. There was a focus on product improvement, some of which has been delivered, but it appears there is more to be done to catch up with the top two operators in online sports. 2024 will now be an investment year as it looks to acquire customers and gain share. However, we felt the update was lacking in some of the granular detail as to how it intends to acquire customers at a sufficient rate to hit its medium-term market share aspirations. Overall, given the momentum evident in the top two operators, we would perceive the profitability pathway as disappointing.